Download Public Utilities Board Insurance Review Website Comments

Public Utilities Board
Insurance Review
Website Comments
Date Comments Submitted Through Website:
March 1, 2005
NAME:
BF
ADDRESS:
St. John’s
NL
TELEPHONE:
EMAIL:
COMMENTS:
The current practice of charging male drivers under the age of twenty five a
higher rate for insurance than female drivers under the age of twenty five
(perhaps a similar practice exists for all age groups) seems somewhat
discriminatory.
From what I understand, this discriminatory practice has been allowed to persist
because statistics show that males under the age of twenty five are more likely
to be involved in an accident than females under the age of twenty five. While
this may be statistically valid (or may have been statistically valid in past
years), it does not, in my opinion, justify charging a new male driver a higher
insurance rate than a new female driver. The fact is that neither of these
drivers have a driving record of any significance upon which to base their
probability of an accident based on gender.
Without getting into a debate over statistical probabilities and gender (or age
for that matter) discrimination, I propose that a new approach be implemented
for insuring new drivers that is not gender biased and perhaps not overly biased
based upon age. This approach will recognize the statistical risk associated
with new drivers and perhaps male drivers in particular but at the same time
allow the new drivers to prove their driving skills without having to incur
undue penalties (i.e. excessive insurance rates).
The new approach would work as follows:
1) New drivers would be charged the same base rate for insurance similar to
that for longer term drivers with no accident claim history;
2) In addition, new drivers would be charged a refundable surcharge to
accommodate the risk factor for new drivers;
3) The surcharge would be refunded (or applied as a credit to the subsequent
years insurance rate) if the driver maintained a clean driving record for the
year.
4) If the driver, did not maintain a clean driving record, the surcharge (or a
portion thereof) would not be refundable depending on the seriousness of any
driving violations or accident claims. For example, only a portion of the
surcharge would be refundable if the driver received a speeding ticket, failing
to stop ticket, minor fender bender with no personal injury claims, etc. If the
driver received more than one ticket for a moving violation or received one
ticket and had a minor accident with no personal injury claims, then none of the
surcharge would be refundable.
5) This system would be applied to new drivers on a declining basis over a five
year period. For example, in the first year the surcharge could be $1,000, in
the second year it could be $800, third year - $600, fourth year $400, and in
the fifth year, $200.
I believe this system would not only reduce gender/age discrimination but would
also provide an incentive for new drivers to drive responsibility. We would
replace a system of punishment based on the records of other previous drivers
with one of incentives for responsible drivers while at the same time protecting
the economic concerns of insurance brokers.
If you would like to discuss further, please call.
Sincerely,
BF